Medium-Size freight businesses, particularly those who have not been in existence for really long, will commonly find it tough to secure a loan. Banks are typically hesitant to provide money to businesses that do not have a great deal of income and assets. They likewise want evidence of the practicality of a company and thus require that many operations, particularly little ones, been around for a certain quantity of time before they are prepared to hand over any cash. Due to the fact that of this, a small company typically has few money producing options when needs occur. One option readily available, but often overlooked, is factoring. This is an exceptional means for a small business to get money.
I gave away my receivables - and made more money too - Select
A Freight�Invoice Factoring Company Instead Of A Traditional Bank Funding
Exactly how to Enhance Cash Flow Without Loaning -Cash Money flow is among the main reasons businesses fail.
At one time or another, every business, even successful ones, have experienced bad cash flow.
Cash flow does not have to be a problem any more. Do not be fooled -- banks are not the only locations you can get financing. Other options are available and you do not have to borrow money. What is trucking factoring ? One solution is called sell receivables. Trucking Factoring is the procedure of offering invoices to a financier instead of waiting to collect the cash from the
client. Oh, the Irony- Trucking factoring has a paradoxical difference:
It is the financial
backbone of numerous of America's most successful businesses. Why is this paradoxical ? Since truck factoring is not instructed in business colleges, is seldom mentioned in company strategies and is relatively unknown to the majority of most of American company people.
Yet it is a monetary process that releases up billions of dollars every year, enabling thousands of businesses to grow and prosper. Trucking Factoring has actually been around for thousands of years. Commercial Factoring Businesses are investors who pay cash for the right to get the future payments on your invoices. An unpaid receivable or invoice has value. It is a debt your client has actually agreed pay in the near future. Factoring Principals--Although factoring
offers exclusively with business-to-business deals, a big percentage of the retail business utilizes a factoring principal. MasterCard, Visa, and American Express all use a type of factoring in their retail deals. Using the purest definition of the word, these big customer finance companies are really just large Staffing Factoring Businesses of consumer paper. Think about it: You purchase at Sears and charge
it to your MasterCard. The store gets paid practically instantly, although you do not make payment up until you are ready.
For this service, the charge card company charges Sears a fee (typical common normal fees range from 2 to 4 percent of the sale). The Advantages Receivable Loan Funding can offer many benefits to cash-hungry companies. Instead of waiting 30, 60, 90 days or longer for payment on an item that has actually already been delivered, a business can factor
(sell) its receivables for money at a little discount
off the amount of
the invoice. Payroll, marketing efforts, and working capital are simply a few of the business needs that can be satisfied with instant cash.
Sell Receivables provides the ways for a manufacturer to replenish inventory and make even more products to sell: There is no longer a requirement to await for earlier sales to be paid. Receivable Loan Financing is not just a cash management device for manufacturers: Almost any kind company can take advantage of Invoice Factoring. Generally, a company that extends credit
will have 10 to 20 percent
of its yearly sales bound in invoices at any given time. Think for a moment about exactly how much is tied up in 60 days' worth of invoices: You can not pay the power bill or this week s payroll with a customer s invoice, but you can sell that invoice for the cash to satisfy those obligations. Using trucking factoring companies is a fast and simple process. The factoring company buys the invoice at a price cut, usually a couple of portion
points less than the stated value of the invoice.
Please call our truck factoring specialists at 1 - 888-239-9162
or E-mail Us
The U.s. Trucking Association
states that there around
195,000 employees with transportation
250,000 personal providers trucking
companies certified to
operate in the U.S. that transported,
according to their latest searchings for billions of
products, supplies and
basic products .
There are numerous usual
groups on our nation
highways carrying these
vital products to our
shops, manufacturing facilities and shipping ports.
Andfreight invoice factoring
countless of them and offer their
receivable loan facilities
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Trucking Companies serving to/from points within the United States, categorized by services offered. United States Trucking Companies will be listed under all categories in which they provide specified Trucking Services. To find companies offering specific Trucking Services in the United States, click on the list of services below.
If you're like most drivers, you're looking for a better company in trucking that might be offering the best jobs in terms of pay, freight, and hometime ' not to mention benefits or a sign on bonus. We've got all of our clients listed based on the states where they're hiring, so you can quickly find the best job in your home state. You'll see the very best nationwide trucking companies that have positions available.
The largest trucking companies in the U.S. set a revenue record in 2013, but revenuegrowth slowed for the second year in a row.
The combined revenue of the 50 largest motor carriers rose to $106.6 billion last year, according to The JOC Top 50 Trucking Companies list, based on data prepared by SJ Consulting Group in Pittsburgh.
Life of a Truck driver, like many other professionals can be very challenging, rewarding, and frustrating at the same time. �The Truckers Place.com� is an information site for many of the Truckers needs. It is designed to encompass the needs of the Trucker, both on the Road and at Home.
List of Trucking Companies for Owner/Operators and Company Drivers
Searching for the right trucking companies to move your freight can be tough, with the large amount of local, regional, and national truck carriers out there. FreightCenter helps make freight shipping simple, finding you the safest, reliable trucking companies every time you ship. Our trucking companies are licensed and insured to carry freight safely and efficiently across the country, no matter the size or type of freight you need to ship.Plus, with the high volume of freight we move, we will work to get you the best freight rates possible. Simply enter in a few details below and you�ll see instant freight rates from all the top trucking companies in one easy screen
The largest trucking companies in the U.S. set a revenue record in 2013, but revenuegrowth slowed for the second year in a row.
The combined revenue of the 50 largest motor carriers rose to $106.6 billion last year, according to The JOC Top 50 Trucking Companies list, based on data prepared by SJ Consulting Group in Pittsburgh.
Turner Truck and Haul has been in business since the mid 1980s. They've delivered goods for nearly every major industry in the nation and for 20 plus years, business was booming as they've traversed the country in all weather for all clients. During the heady times from 2002 to 2007, Turner was a top rated accounts receivable mastermind of the trucking industry. Few customers were ever late on bills and those clients who were, were sure to turn in their late payments within a reasonable amount of time. Times were great for everyone, and the cash was flowing.But a short year later, in the fall of 2008, when the United States economy took a nosedive and businesses both small and large began to feel the pinch on their pocketbooks, those that used to make their demands had suddenly and largely gone silent. Business slowed to a crawl
. And worse yet, Turner had noticed during the early part of 2008 that though the bulk of their clients were always on time with payments, the few late-bloomers there were, had seemingly started to spread this illness. Spring changed to summer, summer changed to fall, and the CEO of Turner, Harold Alvarez, was beginning to feel very uncomfortable indeed whenever he looked at their weekly Accounts Receivable reports. There was a growing list of clients who now owed them back debt.He had gone to his administrators and asked them what the problem had been. Were they doing things different, or wrong, when it came to collecting overdue accounts? By his bookkeepers records, this wasn't the case. Perhaps he was losing his customers to his competitor, who seemed to offer very low prices with no guarantee of quality or performance, and these clients who were in debt to his company had possibly disappeared leaving him stranded. Perhaps they were unable to pay their debt to him, but were able to meet the costs of a lesser service. But after doing the cursory research for this and talking to friends in the field, he found that alas, no, customers of Turner hadn't gone elsewhere. The had just gone!.This current state-of-affairs was causing Harold Alvarez to have some very restless nights. Harold was very concerned, because there were constant overheads, goods to ship, employees to pay, and trucks which needed to be maintained, but there just wasn't the money coming back into the business. In the evenings he would discuss his concerns with his wife, Marie, and still find no relief from the worry and frustration.
""Lin, I have a really bad feeling,"" he would say with deep woe.""Well, what do you think it is?"" she would say.Harold would stare off for a moment and then close eyes. He could see the fleet of trucks he had purchased over the years. He could see them on the road, delivering good to all his loyal customers. But then a haze would cover his trucks and his vast fleet would vanish to leave just a few. Why couldn�t he work out how to resolve this financial problem with his business?""I think I know what it could be,"" Harold said. ""I've relied too long on the profits I receive from invoices alone. For too long I've been allowing our clients to let their accounts become overdue."" Linda could only grab her husband's hand and look at him lovingly, ""It's a hard economy. It might be awhile until things get settled up.
""Harold knew his wife meant well, but he knew that he was responsible for too many people to sit idly by, waiting for the sun to peak over the clouds.The next day Harold strolled into his office and was determined to sit down and make every phone call to every client who had owed Turner money. This wasn't really a very efficient way for a Chief Executive to spend his day, and Harold knew he should be overseeing all the other sides of the business, such as shipments and deliveries, approaching prospective customers, or working with his sales team. But, he felt like he was doing something proactive to help his business, even though he had staff on salary to do just that thing. Wasting money, wasting time - even with the best of intentions, Harold knew that he was in trouble.
Poor Harold spent the whole morning trying in vain to contact his debtors: they promised to call back, dodged his calls, or made small interest-only payments. He was beginning to feel quite despaired when his secretary knocked on his door.
""Harold, can I have a word?"" she queried, standing in the doorway.
""Sure thing Tina, come on in."" Harold relaxed back into his chair and looked up at Tinaerley.""Well, I did a little searching this afternoon and tried to figure out a way out of this mess Harold."" She pulled a small stack of papers from a folder and set them on the desk before him.""Have you ever heard the word factoring?"" she asked.""It sounds vaguely familiar. What is factoring""? he asked.""Well,"" she began, ""It�s actually quite simple really.
So basically, factoring invoices would enable us to get paid on the nose for loads that we haul.""""Immediately?"" Harold interrupted.""Yes, immediately,"" she continued, ""It's actually very simple. We start by having a professional account manager review our figures and help us set up a company profile. Included in the profile would be the investigation of our accounts receivable aging reports, our current customers' credit limits etc.. In addition, factoring will assist in determining our customers' creditworthiness, independent from their credit relationship with our company. It�s a broad view.��I see,� Harold said. �And then what?��Following the completion of their review and once we've been approved for a contract with the factoring company, then we sit down to negotiate conditions and terms. There�s a lot of flexibility depending on the business volume and credit histories. This company tells us what the cost will be to purchase factoring for our accounts receivable. The funding commences once we�ve arrived at an agreement.�Harold was still a little concerned. He leaned forward in his chair and studied the paperwork very closely.""It sounds too good to be true, Tina,"" he said.""Yes, I know; that's exactly what I thought at the beginning. But really, they have guaranteed us experts that do all the legwork, which would free us up here to focus on our clients in good standing and marketing, all that good stuff. They appear to be very flexible, Harold,"" she underlined a paragraph on the paper before him.""How flexible?"" he asked.""It seems that they personalize their factoring charges so that the amount they're prepared to work with is commensurate with our client's debt and our needs. Apparently they can figure this all out in two to four days.
""""It does all sound pretty good, remembering that we're all tapped out now with loans from the bank last year to repair vehicles, and we all know just how tight money is. It's imperative that we keep the business rolling as usual, and every day we go unpaid we're getting closer and closer to dealing with some serious issues in both the short term and the long term,"" said Harold.Harold took in a long slow breath, then looked at his secretary with something like hope in his eyes.""Exactly�. I think this might just be a way out of the trouble we're in with these folks who owe us money.""Harold took a moment to think about this solution, and agreed with his secretary. The clients who owed them money were long standing friends and professional resources of Turner. They didn't want to throw away these relationships because they were having trouble paying their bills now. He was well aware that the economy was in a bad way and that it might be quite a while before things started picking up. That unknown amount of time could create a disaster situation for both of them if he wasn't careful in how these debtors were handled. He didn't want to lose business but he also didn't want to lose any more money.""Let me go over this tonight Tina, and thankyou."" Tina nodded, satisfied with her work, and she left the office feeling quite content in the knowledge that she had helped Harold keep the shirt on his back, and possibly hers too.Harold sat behind his desk and looked over the details Tina had not mentioned in their meeting. He wondered if there might be other problems freight factoring could help Turner Truck & Haul with? With his pencil gliding down the sheet he noticed that the factoring company could help fray the cost of fuel with fuel discount cards and fuel advances. Harold was surprised: it said that his company could get up to fifty percent cash advances on load pickups. Harold was a typical business man: he despised binding contracts that didn't allow room to breathe, so he was pleasantly surprised to see that the factoring company didn't require a long term contract, that there was no minimum volume required, and that there were no sign-up fees.""I must tell Jerome the good news,"" Harold muttered to himself.Harold's son-in-law, Jerome, loved the idea behind Turner and highly respected his father-in-law for having such great business sense, that two years ago he got his capital together and started his own transportation company. At that time Harold knew the struggles Jerome would face, but he still encouraged him to follow his dream. With the faltering economy, if a big fish like Turner was hurting, a little guy like Jerome was about to catch his death. Perhaps the antidote to these problems was in freight factoring, and they were about to find out.A few months later after going through the entire application process and having the experts review his accounts receivable, credit history and statements, Harold found himself beginning to dig his way out of the hole his delinquent account holders had created for him.They took on reasonable factoring purchase contracts and stopped spending their precious man hours scrambling to collect debt. They took that time and refocused effort to offering competitive prices in new territories. Harold recalled those dismal months when he wasn't aware of freight factoring, and he shuddered at those memories. If Harold hadn't discovered freight factoring at just the right time, his business may not be operating today.
More Trucking Factoring Companies Story Articles
Factoring in the Future of a Trucking Business: A Story The phone was ringing on his desk, and Wayne Watson just sat there letting it ring. He let his morning coffee cool and left his cigarette to ash itself in the tray, because he is trying to make the biggest decision ever for his trucking company. Watson Trucking Company had reached a turning point and he now had to make a decision as to whether he should sign up with a factoring company, and indeed if this would be a good or regrettable decision for his business.
Wayne�s father had started as an owner-operator and had grown Watson Trucking Company into a fifteen trailer fleet over forty years. Yes, they had survived some very difficult times when it appeared like they might go under, and even Wayne's mother had jumped into the cab at times to make hauls. His father had lived long enough to witness the price of hires drop during the recession and watch the eruption of fuel prices afterwards. Now the company was solely in Wayne�s hands and he wanted to live to see it in better shape for his sons.
To move Watson Trucking Company ahead into the future, he needed a steady cash flow but there was just not enough money to go around. He had employees to pay. They had families and household bills too. A few of the refrigerated trailers really needed some maintenance, and in order to stay competitive he really wanted to invest in specialized haulers to meet the increasing requests for loads of agricultural and energy equipment. Every time he had to turn down a request, Watson Trucking looked weak in a very strong market.
He knew what his father would have said - 'wait, take your time before adding new technology'. Wayne chuckled, thinking about his father. His father had been against placing GPS units in the cabs. His Dad would say ""Why on earth do you need some stranger telling you to get off the exit that everyone knows has been there for years?� Also his father had the habit of teasing all the drivers he caught switching into automatic even though driving in automatic was much more efficient though not manly in his father�s eyes. His father days were long gone and technology was actually an important improvement for the business such as having Qualcomm to cut down on fruitless time communicating on the phone for bills of lading.
Wayne believed a successful man is always thinking of his next step. How would he take Watson Trucking to the next level? And how would he be able to afford it? Funding was all tied up in the mortgage for the office and garage and in the fuel bills. He just finished paying off the small bank loan for installing satellite radio in the trucks for the guys.
But was factoring the answer? There was a lot he didn�t understand about the process. It sounded a lot like ninth grade algebra which just didn�t feel like it belonged as part of the trucking business. A factoring company actually purchases your invoices and takes control of your accounts receivable, payment being a certain percentage of the amount invoiced. The factoring company gives the trucking business its payment right away which allows the business to have continuous cash flow so it can pay employees, buy fuel, and make repairs for upcoming hauls. Without the assistance of factoring, you have to wait for customers to send you the payment which is often 30 days late. During those thirty days the trucking company can't pay its employees and bills with invoices.
Wayne had to really consider what his next step was going to be. Wayne had heard that there were companies that charged for same day money transfers and would only advance a percentage of the money owed to your company while holding the rest in a private account if they didn�t get their bill payment within 60 or so days. Worse still, if the customer defaulted on payment, the factoring company takes it out of the money supposedly coming to you! He'd even heard about some companies putting you onto a sliding percentage scale regardless of any previously signed contracts for possibly 3% or 7%, and there you are now with 10% coming as a charge to you out of the freight bill. His colleague, Ronnie, who owned a trucking company in Missouri, was nearly destroyed by a factoring company who charged him the full freight bill on top of the fees for factoring. He knew he would have to be very careful if he was to avoid any of these shady companies?
But it turned out to be quite easy. When he called the factoring companies he discovered they were very open about their business practices, and very friendly and helpful. Their customer service actually knew things about their company and spoke in nice clear English so he could understand what was being explained. He was quite happy to sign an exclusive contract. He liked the idea of a long term commitment so he knew he wouldn�t have to bother going back and forth to different companies and wasting time filing more forms. Nobody charged him for credit checks and they offered him a fuel advance on the pick-up of the load. Many companies offered a non-recourse factoring program that suited him just fine. Also he was happy to hear how much he was offered in terms of percentages on the freight bills. It sounded like a great scheme to him.
It was really refreshing dealing with the factoring people. They were extremely helpful and more personable than the bank staff. It seemed as though those bank people spoke another language, but these factoring guys knew the trucking business and spoke to him like a client, not like a beggar for a handout. The factoring companies were not interested in his credit nor the financial problems his father had experienced in the past. Factoring was based on the credit of his customers and on their reliability which worked well for Wayne because he and his father had built up good strong relationships over decades with their list of clients. He knew immediately that there would not be any problems when they were contacted by the factoring company regarding their invoices. His clients wouldn't have any problems, nor would they think poorly of Watson Trucking, because the factoring companies handle themselves in such a polite and professional manner, similar to the way his father had managed the business in the past.
Wayne stepped out of his office to let his secretary know to expect the arrival of the factoring contract shortly. He felt exhilarated by the new possibilities that would make the future of the company fun again and put the stress of the difficult times behind him. He suddenly realized that, with this new cash flow, he could actually expand Watson Trucking Company and who knows, move into Canada, which had always been his dream. His heart felt full knowing his sons wouldn�t have to worry about money because of the right decisions he had made for their trucking business.
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Trucking Factoring Articles
�So It is not a loan?� Oscar Diaz asked as he leaned back in his chair, crossing his legs. The woman sitting across the desk from Oscar smiled at him, shaking her head.�No, not exactly,� she said.Oscar Diaz owned a small trucking company, and his business had recently fallen on difficult times. Trucking could be a profitable business, and for a little under a decade, it had been for Seth. He named his business Harper Trucking, named after Nathaniel and Adrian, his two grandfathers. They had both been hardworking men, and had done a lot to make Oscar the same.Six months ago disaster struck Seth's business when two out of his fleet of fifteen trucks were taken off the road.
One was a roll-over and ended up in the trucking graveyard: the other was involved in a serious and costly accident. The financial security of Seth's company relied on his full fleet on fifteen being on the road, and missing two trucks was just devastating . In addition, he just didn't have the available cash to buy a new truck, plus repair the other one.Paying of bills in the trucking industry is always a major cause for concern for businesses.
Waiting a month or longer for bills to be paid was quite normal. This system works okay as long as no problems arise, but if they do, then things can get quite sticky.Oscar wasn�t a bad owner, and he hadn�t messed up. Certain events had occurred that he couldn't possibly have predicted, and now he had to find a way to protect his business and prevent it from ultimate devastation.And that's why he found himself across the desk from this woman. Her name was Edith and she worked for a factoring company. Oscar had come across her company as he sat in his office late one night, pouring over the internet for some solution to his problem long after his employees had gone home.She sat there now, and explained. �It�s not a loan, we purchase your accounts receivable. We aren�t giving you money to be paid back later, we�re buying something from you, and you can buy it back when you can. This is a win-win situation: we're protected from a total loss, and you're protected from the ridiculous fees and charges you'd have to pay if you borrowed from a bank.Oscar nodded. It sounded good to him, almost too good.Edith laughed. �You look like you don�t believe me,� she said.�No, I do, I just think it sounds a bit too good to be true. I actually thought I might end up losing my business.�Edith nodded. �Yes, we get a lot of that. There's no way we want to see you lose your business. You work hard, you�ve put everything you can into it. Sometimes you need help. That�s what we�re here for.��Well, I'm very grateful that you came to see me today.��It�s right down the road, usually we do it all online, but I didn�t mind swinging on by today,� said Edith with a smile. �Let's work out a solution to your problem.�And right there and then they created a business profile. Oscar completed the form, with Edith offering advice as needed.
The completed profile gave Edith and her company all the information they needed on Seth's business, and with this information they would determine if this business would in fact be suitable for Factoring. Unfortunately, not all companies are. Some businesses are beyond the help of a Factoring company, while other businesses weren't in enough financial stress to warrant it. Listening as Oscar filled out his form, Edith was pretty sure he was a perfect candidate for factoring.Edith took the completed form and placed it in her briefcase. Standing up, she reached over the desk and shook Seth's hand. He also stood up, and they smiled at each other. They said their goodbyes and Oscar walked her to the door, and then returned to his office.His employees were there, seven who worked in the office, and as he sat behind his desk once more he heard the familiar clack of fingers on keyboards, the electronic whine of the copy machine.He leaned back and closed his eyes. He had felt so helpless lately, was sure the whole thing was collapsing, and would take him with it. Talking to Edith though, learning about factoring, it felt like a weight had been lifted from his shoulders. He sat back in his chair and ran a hand through his graying but still thick black hair.All those long, sleepless nights. The terrifying panic attacks that occurred regardless of where he was. Already he could feel all the stress start to drain away. He knew it wasn't over yet and that there was still a way to go, but he could just feel everything start to change for him. He was still here; he knew this was the right path for him, and he felt proud that he had taken the appropriate steps to sort out his problems.His mind wandered back to the very beginning, when he first started his business. He had opened a restaurant at age twenty two when he was fresh out of school. It had been successful. Offering home cooking in his own hometown, his business had really prospered.But he had gotten bored. His passion didn�t lie with the food industry. He thought about it for a long time, then decided it was time to sell his restaurant. He took six months off, and during that time he decided to create Harper Trucking. And that's exactly what he did. For the second time in his short life he created a company from the ground up. The business had been an instant success.Then disaster! The two trucks went down and suddenly his success wasn't looking so guaranteed. He was about to turn fifty. He was concerned that he just didn't have the energy left to try and save the business. But he couldn�t give up. Just the thought of shutting down, cutting his losses, laying off his workers - the whole thing made him physically sick some nights. He didn't want to quit - both for himself and for his staff members.And now it seemed as though he wouldn't have to - all because of Factoring. Oscar opened his eyes, sat forward, turned his computer on. He had lots to do. There would be plenty of time later to be thankful, but for now it was time to get back to work.
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The key reasons why Trucking Firms Employ Factoring Companies.
As the operator of your own business, you may likely be more than knowledgeable already of the hardship in making sure that capital matters do not become a predicament down the line. After all, the most disappointing thing that can potentially come about for your establishment is to find yourself embroiled in a long and tough predicament that leaves you forever looking for the resources you require on an continual manner.
For any type of company in this condition, the issue can come for waiting for work to lapse and actually be repaid into your balance. Invoices, checks, and the like could take a while to actually to beprocessed which can easily leave you with momentary cash flow problems. Thank goodness, there are solutions out there for enterprises to examine-- and among these is factoring companies.
Factoring firms will, in substitution for your invoices, provide you with the cash right now to ensure that you don't have to worry about the lingering time span which could make paying off the expenses and obtaining materialsmore difficult. With this type of system, invoice factoring can become remarkably beneficial for several companies who have to avoid a money lure which they have discovered themselves in.
For the reason that, depending on the volume of the task, it can take up to 60 days for some firms to get paid then it's crucial to cover up your own back and not leave yourself resources short to pay off the bills. After all, how many businesses have two months revenue just occupying there to deal with all their overheads till they get paid?
This is primarily correct of trucking firms. They often tend to take care of bunches of statements which means a notable amount of collection time demands business owner themselves. Attempting to get paid out promptly can come to be an incredible difficulty and this is the reason why you make use of truck factoring organizations who are thrilled to help out truckers exclusively.
As we all know, trucking is an astonishingly huge industry with plenty of companies out there working with hundreds of vehicle drivers. Regretfully, plenty of these drivers land up in money dilemmas due to the fact that they are still awaiting work from six weeks in the past to actually compensate them. When this is the condition for a trucking company, turning to factoring companies for assistance maybe the ideal alternative left.
This implies that a trucking company can pay the paychecks of the work force, keep all the vehicles refilled with gas and continue to surmount, develop and expand without consistently waiting for the finances which is taking too prolonged to come in. Trucking Firms running without a factoring system used are leaving themselves at significant risk, as competitions cash out quickly and go on to broaden.
There's honestly nothing to be stressed about when it comes to using a Factoring firm-- they usually are not like a banking company or a person who is going to leave you with a significant mass of personal debt to pay back. You give them authentic invoices from work you have already completed , you are merely speeding the payment process.
In the United States, where truck firms flourish, factoring establishments are not considered taking on loan in any capacity. This private agreement then makes it possible for both parties to profit and take pleasure in a good future-- it provides the factoring firm a guaranteed resource of revenue to include in the list and it gives the trucking business the required finances that they worked hard to earn.
The trucking business presents their invoices to the factoring enterprise. The trucking factoring business then acquire the payments from the trucking company's clients. Factoring has beenaround for hundreds of years and has been employed for long times by many different sectors-- but none much more so than truckers. While you may miss out on a small part of the money, something like 1-3 % depending on who you partner with, it implies that you are acquiring the funds today and can actually begin setting the cash to perform.
Once and for all, an IOU or an invoice is not going to fund bills, is it? For trucking firms when the finances can be good one day and gone the next, it's up to the drivers to work sensibly and to make sure that they are leaving themselves with a considerable amount of time and finance to get through the week up until they are compensated once more.
So the next moment your trucking company is bearing some temporary capital issues and you are devoting way too much time chasing slowly paying clients, why not begin thinking of using a factoring companies as a manner to get your cash and give yourself a more at ease future in the eyes of your trucking personnel and your bank balance?
Traditional Bank Loans
Finance through a bank loan is the normal, or traditional, way of financing your business. These loans can be a life-saver, but they're not always available to every business. As an example, a newly formed business may not have the required assets to qualify for a bank loan, and even if they did, it's usual practise for a bank to use the business itself as collateral. This means that if you default on your loan payment you could lose your entire business. In addition, while you apply for a certain loan amount, that is all the financing you are entitled to. Of course, once that loan has been re-paid, you can always re-apply for another loan.
What Are Trucking Factoring Companies?
Trucking Factoring companies do not give loans, and the money you get from the Trucking Factoring company does not put you in debt. Rather the financing you receive from a Trucking Factoring company is based on money your business has already earned, but have not yet received. Trucking Factoring companies actually purchase your accounts receivable or at least part of them for a percentage of their total worth, Normally around 80%-95%. The amount of money you can receive is based on the amount of money you have earned and the accounts receivable you are willing to �sell.� Once a Trucking Factoring account has been created for you, it will continue for as long as you need it, with the money available continuing to grow as your business grows, and providing cash as you require it.
What Are The Benefits Of A Trucking Factoring Company Versus A Traditional Bank Loan?
Not every business can benefit from Trucking Factoring account financing because you have to have a business with accounts receivable, however there are many benefits for those who can access this type of finance.
1. There is no debt. Since the Trucking Factoring company actually buys your accounts receivable you don't actually incur debt like you do with a bank loan. This has many benefits including the fact, that this type of financing won't affect either your business credit rating or your personal credit rating. Should the unforeseeable happen and your business fails, you won't have to worry about anyone coming after your personal as well as your business assets to pay off a loan. With a bank loan, the debt goes onto your credit report, and even one late payment can adversely affect your businesses credit, and even the ability to get insurance and may even reflect upon your personal credit rating.
2. There's no collateral required. Another benefit of using a Trucking Factoring company instead of a traditional loan is that you aren't required to provide collateral to the Trucking Factoring company in order to secure financing, because the company �buys� the accounts receivables; not loans you money based on them. Plus, the state of your credit rating is not an issue; however the Trucking Factoring company will run a credit check on your clients whose accounts receivable are being offered for financing. This means that it's easier for new businesses to access the finance they need through a Trucking Factoring company, providing their accounts receivable are in good order. A bank may believe you haven't been in business long enough to be able to cover this risk.
3. Receive Your Money Faster. Using a Trucking Factoring company means that you'll get the finance quicker. The money will normally be in your account within 24 hours, once the Trucking Factoring company is confident that your customers� accounts are likely to be paid. Borrowing from a bank begins with vast amounts of paperwork, the loan must be underwritten, and this can take ages before you're notified if the loan has been approved.
4.You receive interest up-front. With a bank loan interest continues to build, and this has to be paid the whole time you have a business loan; however with a Trucking Factoring company there is no interest - they take it right off the top by deducting it from the total amount of receivable accounts. So you don't have to worry about monthly loan repayments, and you don't have to worry about the amount of interest payable, because all the money in the account is yours to spend.
As you can see, there are several benefits that makes considering financing through a Trucking Factoring company over a traditional bank worthwhile. In addition, there are other benefits that a Trucking Factoring company can offer you, outside the scope of a bank. The main benefit is that once you've sold your accounts receivable to the Trucking Factoring company, you are free from having to collect money owed by your customers. The Trucking Factoring company takes over that chore, since it is now their money to collect. Trucking Factoring companies are very good at collecting these debts, saving you the time and effort that you need to devote to your growing company.
In addition, since the Trucking Factoring company evaluates the credit quality of your customers prior to purchasing the accounts receivable you gain valuable information into which customers are likely to pay and which ones are not so likely to pay.While a Trucking Factoring company is not the only way for your business to obtain the money it needs to keep growing, it does offer a type of financing well worth considering.